Finding Smoother Air beyond the Turbulence

American Airlines chief Doug Parker knows how to manage through tough times

W. Douglas "Doug" Parker Chief Executive Officer, American Airlines

Vanderbilt MBA 1986

Early on, Doug Parker began to develop a nose for business and a strong work ethic, thanks to the influence of his father, a division president with The Kroger Co. Each week his father visited the company’s grocery stores across the Midwest and often would invite him to ride along. The trips gave the younger Parker an opportunity to learn firsthand from a man who had worked his way up from the meat counter to the corporate office.

“I learned two things from watching my dad,” he says. “First, when you work for a company, you should make sure you give them a good day’s work. Second, you should always listen to and respect the employees who are interacting with customers.”

The nature of his father’s job meant the family relocated on several occasions, including to Nashville around the time Doug was graduating from Albion College with a degree in economics. Unsure about his career options, he enrolled in the MBA program at Vanderbilt.

There, he found that he most enjoyed his finance classes, and that interest convinced him to target heavily capitalized businesses for employment. As he puts it, “I knew finance would be important there. I didn’t want to work at a company that was driven more by, say, its marketing department.”

As it turns out, one such heavily capitalized business, American Airlines, happened to be recruiting on Vanderbilt’s campus that year.

“After my first interview I flew to Dallas to interview with the whole team,” he says. “As soon as it was over, I knew it was where I wanted to work.”

After five years with American, where he began in the finance department, Doug landed at Minneapolis-based Northwest Airlines, where he served as vice president and assistant treasurer, and later as vice president of financial planning and analysis. Getting an up-close look at the balance sheet of a second carrier gave him a broader understanding of the tight profit margins and other financial challenges facing commercial aviation at the time.

It also made him resolute in the knowledge that overcoming those challenges was possible. “From the time I started in ’86, people have been talking about how our business isn’t like any other and that it can’t make money,” he says. “They’re right about it not being like other businesses, but the part about not making money never made any sense to me.”

In 1995, Doug left Northwest to join America West Airlines as its chief financial officer. Within five years he became the airline’s president and, soon thereafter, its chairman, president and CEO. The latter promotion was effective Sept. 1, 2001. As Doug says, “It was a good 10 days.”

Sept. 11 marked the beginning of a difficult decade for the industry. “A number of cataclysmic issues have affected our industry—not just 9/11, but fuel prices rising rapidly in 2008 and then the Great Recession,” Doug says. “The fact that we couldn’t handle all these issues was a symptom of a larger problem. Ours was a fragile business to begin with.”

The fragile nature of the industry led Doug to become a vocal proponent of airline consolidation. He has overseen mergers twice in his career. The first, between America West and US Airways in 2005, resulted in his becoming chairman and CEO of a revamped US Airways Group. The second merger—between US Airways and American in 2013—put Doug in charge of the world’s largest airline.

As he reflects on how he got there, Doug looks back to his experience here. “If it weren’t for Vanderbilt,” he says, “I don’t think I would have been in this business.”

“You should always listen to and respect the employees who are interacting with customers.”

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